World Watch

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An armed man held 25 children and three teachers hostage for more than 28 hours at a daycare center in this Luxembourg border town. The 39-year-old Tunisian-born man, said by police to have a history of mental illness, was demanding a minibus to take him to the airport, and then to be flown to Libya. Police and his psychiatrist tried to negotiate with him by telephone. Eventually policemen pretending to be a television camera crew lured him outside, where he was shot twice in the head by a police marksman. None of the hostages was hurt.

Hundreds of investors blocked traffic here, while dozens of others in the capital Bucharest converged on the presidential palace in an attempt to recover money lost after a high-risk investment fund ceased payments. More than 300,000 investors had deposited $150 million in the fund, which offered interest rates of up to 200%. Rumors that the fund's collapse would squeeze cash flow elsewhere led to a run on a major state-operated bank as well and the International Monetary Fund delayed a decision on a new loan because of the turmoil. Six former aides of Maria Vlas, the fund's director, have been arrested on charges ranging from fraud to professional negligence. They could face terms of up to 15 years if convicted. Vlas has left the country, police said.

In the outskirts of the leveled Chechen capital, a car carrying a high-ranking Russian delegation hit a remote-controlled land mine, killing Sergei Zverev, the second-ranking civilian official in the Russian administration in Chechnya, and Nusreda Khabuseyeva, an aide to Grozny's Moscow-appointed mayor. The target of the attack is believed to have been the city's mayor, Supyan Makhachayev, also in the car at the time, who was wounded but survived. Russian officials sought to downplay a blast in a military base in the southern city of Volgograd that killed two soldiers and wounded more than a dozen. After eight months of fighting, Moscow claims to control nearly all of Chechnya, but a series of recent guerrilla attacks call those claims into doubt.

Addis Ababa
Ethiopia announced that its two-year war with Eritrea was over and offered to return all newly captured land if Eritrea joins a cease-fire. But Eritrea said it would keep fighting until Ethiopia had pulled out of all Eritrean territory. The Ethiopian announcement came after a three-week offensive which saw it win large tracts of land. Eritrea conceded Ethiopia's victories but said it was readying a counter-offensive. Meanwhile, peace negotiators from the two countries met Organization for African Unity mediators for "proximity talks" in Algiers. Mediators hope a break in fighting will lead to face-to-face talks and a peace deal between the impoverished and drought-stricken Horn of Africa neighbors. The two-year war has so far left tens of thousands dead and cost each country an estimated $1 million a day.

The Zimbabwe government has amended the country's land-ownership laws to allow the seizure without payment of up to 841 white-owned farms, but President Robert Mugabe has agreed that a $14 million grant from Norway and Saudi Arabia, negotiated by South African President Thabo Mbeki, could be used to compensate some farmers. As political parties began drawing up lists of candidates for the general election, set for June 24 and 25, a U.S.-based National Democratic Institute's election observer group, after visiting Zimbabwe, has said the country is not ready for free and fair elections because of the high levels of intimidation and violence. At least 26 people have already been killed. President Mugabe has welcomed Commonwealth observers during the election but said he will bar British officials from monitoring the voting process.

Banda Aceh
The Indonesian city of Banda Aceh was rocked by several small explosions only hours before a landmark cease-fire agreement was due to take effect. More than 6,000 residents in several villages in Pidie Regency, North Aceh, fled from their homes to nearby mosques as the Indonesian army searched for Free Aceh Movement (gam) rebels. The Indonesian army insisted that it was only a routine patrol. Separately, gam's secretary-general, Tengku Don Zulfahri, was gunned down in Malaysia, allegedly for his strong support of the cease-fire agreement. With both parties still busy accusing each other of violence and intimidation, it seems doubtful that the cease-fire agreement can hold. Signed in Geneva on May 12, it was an attempt to put an end to violence that has killed more than 5,000 people in Aceh province in the past 10 years, with more than 300 deaths this year alone.

Quickly following Philippine President Joseph Estrada's goodwill trip to China to strengthen ties between Manila and Beijing, a shooting war erupted in the disputed Spratly Islands between Philippine troopers and alleged Chinese fishermen. The skipper of one Chinese vessel was killed. Seven of his crewmen were arrested and are now in a Philippine jail. The incident marked the first fatal shooting incident between a government naval patrol and the alleged illegal fishermen. According to the Philippine police, local fishermen first saw a foreign vessel in the territorial waters of Rizal town, 207 km south of Palawan province and about 670 km southwest of Manila. As a team of Philippine troopers went to investigate, the Chinese vessel sped away. One of the Chinese crew reportedly opened fire, later joined by others. The Chinese now claim the boat's crew was not armed.

Hong Kong
Hong Kong's last Vietnamese refugee camp was officially closed last week, over the protests of nearly 140 people who refused to leave, claiming they lacked jobs and sufficient resettlement money. The closure marks the end of a 25-year saga, which saw more than 220,000 people flee to Hong Kong after the Communist victory in Vietnam. Most have been voluntarily or forcibly repatriated, or resettled in other countries. The Pillar Point Vietnamese Refugee Center housed the remaining 1,400 people who were refused resettlement because of their criminal records or because of questions raised over their nationality. In February, the Hong Kong government granted residency rights to most of the remaining refugees. It is unclear, however, what will happen to the people who remain inside the closed refugee camp.São PauloCelso Pitta, the mayor of São Paulo, was finally forced out of office by a court order after it was discovered he accepted a $440,000 loan from businessman Jorge Yunes. Pitta was exposed in March by his former wife Nicéa, angered by rumors that the mayor was seen with a Brazilian socialite in Paris. Vice mayor Regis de Oliveira was sworn in as mayor. Pitta, 50, was the first black mayor of a major Brazilian city.

Bowing to public pressure, Human Resources Minister Jane Stewart agreed to dismantle what has become known as the Big Brother database, files cross-referencing as many as 2,000 pieces of information on almost every Canadian, such as income tax returns, employment records and immigration documents. When the database was revealed in mid-May by Privacy Commissioner Bruce Phillips, who criticized the fact that information was being shared by different branches of government, citizens flooded Stewart's office with complaints. Phillips found no evidence of abuse, but said the database created the potential for huge violations of privacy rights.

Chanting anti-U.S. slogans, hundreds of thousands of Cubans broke out in protests over a U.S. federal appeal court decision that allows Elián González to stay in the U.S. for two more weeks while his cousins consider launching an appeal. The court ruled that the 6-year-old boy is not entitled to a hearing for political asylum in the U.S., upholding a decision reached by the Immigration and Naturalization Service. Despite the protests, the boy's father said he was "very happy" with the decision.

Ignoring the advice of international observers, Peruvian authorities went ahead with a presidential election, although one of the candidates, economist Alejandro Toledo, 54, had pulled out, saying the process was rigged. President Alberto Fujimori won an unprecedented third five-year term. However, heeding calls from Toledo, 30% of voters spoiled ballot papers. International observers from the Organization of American States, the E.U., the Carter Center and the National Democratic Institute pulled out monitoring teams. The U.S. State Department called the process "flawed" and called Fujimori's presidency "illegitimate."